Income tax reports must be filed properly for both individuals and companies to stay in financial compliance. Not turning in your ITR by the due date could lead to fines, interest charges, and other penalties. In this blog post, we are going to talk about how to file an ITR for the past three years, why some people might have missed the due dates and the benefits of putting in late reports.
Understanding the Due Dates to File Your ITR
Corporations have until October 31 to file their taxes, but salaried people have until July 31 to do the same. These are the normal due times for making income tax reports (ITRs). Still, one should understand the idea of a late return. If you miss these deadlines, you can still send in your income tax report, but you will have to pay a late filing fee. The late filing fee, which could be anywhere from ₹1,000 to ₹5,000, is based on how much income you are taxed on. This charge is meant to ensure the smooth operation of the tax administration system and inspire quick tax law compliance.
Can I File an ITR Covering Three Years Now?
Indeed, even if the due dates have already passed, you may still send your income tax returns (ITRs) for the last three years. Along with the current AY, the Income Tax Department lets people make delayed returns for up to three assessment years (AYs).
Use the ITR-U form—which is especially meant for making ITRs for past years—to file these overdue forms. Along with the current AY, this form lets you send in your records for the previous three Assessment Years.
By helping you avoid fines, interest charges, and other effects coming from non-compliance with tax laws, filing these delayed reports helps you avoid it. It also promises that your tax records are current and that you may claim any qualifying costs or returns for past years.
Motives for filing ITRs for past years
People may have missed filing their ITRs in the past years for various reasons. Some common reasons include:
- Lack of Awareness: Many people do not know the need to send ITRs or might not understand the process.
- Change in Employment: Particularly in cases where the new boss is unaware of the past employment records, a change in employment status might cause ITR filing delays.
- Personal Conditions: Personal events such as sickness, family problems, or move might make prompt filing of ITRs tough.
- Complexity of the Process: Filing ITRs may be tough, especially for people not familiar with tax rules and processes.
Steps to File ITRs for the Past 3 Years
Filing ITR for past years needs both careful attention to detail and cautious planning. The rules are as follows:
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Gather the required paperwork:
- Form 16, if relevant: Your company gave a TDS license here.
- Form 26AS: Your monthly tax account showing the tax deducted at source (TDS) on income here.
- Proof of investments in tax-saving instruments like PPF, EPF, and insurance plans becomes part of investment proof.
- Bank Statements: You must show your income and spending from here.
- Other relevant papers might include energy bills, rent proof, and other records proving your income and spending.
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Calculate the correct ITR form:
- Select the Appropriate ITR Form: Choose the right ITR form based on your home status and source of income. The e-filing portal “Help me decide which ITR Form to file” will help you choose the right form.
- Use the E-Filing Website: File your ITR using the Income Tax Department’s official e-filing website.
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Determine Your Tax Obligation:
- Estimate your total income: Calculate your entire pay for every past year to estimate it.
- Applicable Tax Rates: For every past year, get the proper tax rates.
- Tax deductions and exemptions: Think about any tax exemptions or deductions you could be qualified for.
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Electronic ITR file:
- Choose the option for a delayed return: Choose the option file to send a delayed return on the e-filing site (ITR-U).
- File the Details: Complete the necessary information and send the right papers.
- Upload the records: Upload the files in the suggested format.
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Attend any unpaid taxes and interests:
- Calculate the Interest Payable: Find the interest due on the delayed tax payment.
- Use the E-Payment System: Make the payment using the e-payment method found on the e-filing site.
ITR Benefits for Previous Years
Filing ITR from past years offers different advantages:
- Avoid penalties and Interest Charges: Filing overdue returns helps you avoid penalties and interest charges on unpaid taxes.
- Claims Refunds: File delayed returns to be qualified for refunds should you have paid extra taxes in past years.
- Maintain a Clean Tax Record: Filing overdue taxes can help you keep a clean tax record, which will be helpful later.
Results from Not Filing ITRs for Previous Years
Failing to file ITR returns for past years might have dire results:
- Fines and Interest Charges: On unpaid tax liability, you will be forced to pay fees and interest charges.
- Inability to Carry Forward Losses: Not being able to take certain discounts or carry forward losses.
- Problems Getting Loans and Credit: If someone doesn’t follow tax rules and laws, it might be harder for them to get loans, credit cards, or other financial services.
Conclusion
In conclusion, following the tips on this blog can help you avoid the consequences of non-compliance and send delayed returns. Essential is getting all the necessary papers, picking the right ITR form, figuring out your tax due, and online ITR filing. See a tax attorney if you have any particular questions or concerns. Recall that sending ITRs for past years helps you to promise that your financial situation is under control and that you follow tax rules. Following the needed steps will help you to keep a clean tax record and avoid fines and interest charges.